All Forum Posts by: Account Closed

I've been buying properties for 55+ years and never purchased properties with a negative cashflow. Although, I've was wrong starting in the mid 1975 when real estate in California was $49,000 for homes in nice neighborhoods and they were increasing $10,000 every month. Almost every property had a negative cash flow and I did not know that within a few years these properties were selling for $180,000 People were doing turn-around escrows like crazy. But, I don't see much room for appreciation in today's market and I may be 100% wrong. Regardless, of whether I am wrong or right you always have to consider the risk. Are you willing to take the risk by thinking properties will appreciate. If you are wrong you lose money. Or, would you rather hold onto your money and wait for a sure-thing.

About 15 years ago, I purchased 10 homes in Boise and Meridian Idaho and was hoping they would appreciate at least 4% every years. I made a small amount of money, but never came close to my hopes. 

With current real estate prices so high, I would not buy any property, but I've been wrong many times and there were many properties I did not buy and they turned into goldmines.

Again, with today's high prices I will not invest unless I find a sure-thing. I made millions of dollars by holding onto my money for several years at a time and waited until a sure-thing comes along where I know I will make the return I want. My business model is to make 50% to 100% on my money in one year and that is done by buying the right property at the right price. 

I suppose, once you are the legal owner of the property you have the right to enter your property for an inspection in accordance with the laws in your state. In California, property owners need to give tenants a 24-hour notice to enter inside a residence. But, tenants sometimes refuse to let landlords inside and then it becomes a legal problem that has to be resolved through a court.

I purchase several properties at auctions and have no problem with knocking on a door to tell the tenant I am the new owner and would like to see inside the property so I can make any necessary repairs that will benefit the tenant. Obviously, you want to introduce yourself in a nice way so you don't come across the wrong way.

When the residents in your new property are the owners and not tenants, I always send a letter first telling them I purchased the property at the auction and would like to set a meeting within 5 to 7 days to discuss their plans to vacate the property because visiting in person could result in some serious emotions that go that take you down the wrong road. I always figure it could cost me $9,000 to evict the current resident and take 6 to 9 months before you every get to see inside your new property.

As far as backing out of an auction-purchased property, I would never ever purchase a property from auction.com online. You had better do your research on the internet regarding the horrors that can happen when purchasing online. When purchased online, I do believe you can cancel your purchase, but you will lose your down payment and other fees you paid. The major problem with online purchases is even after you win your bid the banks often reject your purchase and sell the property to another buyer after you won the bid, or the banks hold up the paperwork for several months, make you jump through hoops by imposing other fees and requirements or cancel the deal entirely.

Purchasing at live auctions is entirely different. You pay cash, what your buy belongs to you and you cannot back out. But, beware about what you buy because very often someone thinks they bought a property and they only bought a 2nd lien (loan) on the property. You really need to do your homework when buying at auctions and have professionals check to see if you will get a clean title because the auctions usually will not tell you. Sometimes, they will.

Nobody wins wars. "Keep your enemies close to you." "It takes two to Tango." Make an effort to show body language the same as you do with your best friends. Say hello every time you see him like he is your best friend. Make believe you just happen to have something you think he will like e.g. some really nice chocolates or a good wine and tell him you need someone to give it to because you are on a diet.

Sorry! I disagree with your assessment about being negative and I believe my question regarding what is or will be different about your software is a very popular and logical question. 

Throughout my past 55 years of working, I started many fairly large start-up projects for a small-time investor. Most of my projects cost from $100,000 to several million dollars and some took 2 to 3 years until completion. One project I invested in and worked with the developer during the start-up stage was the first home automated voice control system in the world called Butler In A Box. You can still find information about this on the internet. 

I also develop fairly sophisticated software applications with MS Access and I developed several software applications for that I give to people for free. These applications do some serious data mining to find properties on the internet, to manage and filter large files and they are terrific for managing direct mail, telemarketing, text messaging direct mail and telemarketing.

I have software applications that do all types of analyzing for crunching numbers, for managing rental properties, book keeping, payroll, reporting taxes and about 50 more applications.

So, when it comes to developing software and applications, I have a lot of experience in regards to how developers can spend thousands of hours developing software they think the public will go nuts for and then find it is difficult to sell because their is so much software already on the market, including free software like mine and it is difficult to get people to switch to your software when they already have a software they are familiar with.

So, since there are thousands of real estate software programs already on the market, I still have to ask what you think will be better about your software.

I develop my own fairly sophisticated software programs for direct mail, texting, emails and telemarketing. Everything comes with a hefty price in cash and time and my results have not been so good.

We did telemarketing for 3 day (24 hours), dialed, dialed, dialed and talked to only two people and the conversation had nothing to do with real estate. I couldn't see dialing for a 4th day.

We sent about 400,000 emails and even with software the management of the email lists requires a lot of time. We did not get 1 lead. What we did was illegal since email recipients have to Opt-In before you send an email and that law defeats the purpose to contact homeowners you don't know to discuss their foreclosure. About 25% of all emails are returned. So, if you don't want to re-send the bad emails and get busted for spamming it takes a lot of time to remove every bad email address. There is canned software that removes bad email addresses, but canned software does not work with my software.

We do 80,000 direct mail letters every year and the cost is about 80 cents per letter  (or $64,000 per year) when you consider the paper, envelope, label and stamp. The direct mail list requires maintenance every time a letter is returned so you can save money on the next mailing.

Almost every property I purchased for discounted prices was found by visiting real estate brokers' offices, telling them what I am looking for and every once in a while I hit a jackpot.

The next most-simple method was purchasing at live foreclosure auctions, but you need to be super careful to make sure you are getting a clear title.

I purchased a few properties from brokers who didn't know poop from Shinola like a $1.4 million 14-unit apartment building for $825,000. The broker I left a business card with called me on the phone and asked me how much a property was worth. He said he had a 14-unit property in Gardena California on Vermont Avenue for sale and I said, "you mean the property on the corner of 161st and Vermont" and he asked me how I knew. I told him I looked at so many properties I knew the property was the only 14-unit on Vermont Avenue in Gardena. I already knew the property was worth $1.4 million because properties were selling for $100k per door and the property was only 15-years old. So, I told him it was worth $800k and he called me the next day and said the seller would take $825k. I had a vacation house in the desert for sale for $300k. A woman offered me $200k cash. I took the $100k loss, but make $600k the same day by putting $20k in escrow for the 14-unit building.

Never ever listen to a broker's advice even if you madly love him because brokers are not you. They have their own fallacies and agendas. A 28-unit apartment building was for sale for $2,250,000. I told the broker to offer $1.9 million and he said the offer was too low and refused. I went to my  broker who I already purchased several properties from and he said the offer was too low and he refused, at first. Then, I told him I would go to another broker and he made the offer. The seller came back with $1,950,000 and I saved $300,000 by not listening to professionals' advice. Then I got $50,000 back for repairs and $18,000 for security deposits making the total savings and money coming into my pocket $368,000

Since this discussion is about looking for properties, I will say what I say almost every day. Don't be anxious to blow your wad of cash to buy a property. Learn to hold onto your cash until a goldmine pops up even if it takes several years to find a property because if you keep looking you will always find properties 10 times better than properties you found earlier.

My business model is to double my investment capital every year. For example, this is very possible when you put $200k down on a property that is worth $200k more than purchase price the day you close escrow, or within one year after you purchased the property at a discount, plus rental income plus appreciation.

How you find properties is important, but what properties you buy is more-critical to maximize your return.

Join every real estate club and only those that have professional speakers who are not trying to sell you a Bill Of Goods. The only club I know that is honest is FIBI (For Investors By Investors). This club has a panel of investors at each meeting and they never try to sell you courses or products. Of course, the virus has put a damper on attending in person and now it is difficult to meet investors face-to-face who can help you.

I've always been a believer that door-to-door farming your neighborhood is the best way to get started. I also believe moat real estate canvassers don't know to get people to talk and the answer to that question you need to have the knack to ask questions and then listen very carefully so you can hear what people are really saying and not what people are telling you.

Most real estate canvassers pass out business cards and scratch paper pads. I toss both in the trash because I get about 10 vendors delivering them to me monthly. I like to give prospective customers something they can use every day and something they will never throw away. We purchased 50,000 coffee mugs from China and the cost delivered was 30 cents each. Many people will use these mugs forever and see our name every day, or they will see our name and list of services every time they open their cupboard.

We purchase 100,000 ink pens with nice rubber grips from China for 6 cents each.

We purchase 250,000 5 x 7 magnet calendars from China every year for about 9 cents each including shipping. We deliver so many calendars we saw them on people's refrigerators in two movies and one rap video and we get about 100 phone calls every year from people when they don't get their calendars. 

We send out about 80,000 direct mail pieces every year and include a business made of plastic similar to a credit card. Most people say they are impressed with the plastic card.

I am not an advocate for telemarketing, but that is the method a lot of agents use to make their money.

I am not a pessimist. I am a realist!

There is a sucker (fool) born every minute!!!

I work with people every day and there are many geniuses who shame me. Sadly, there is an abundance of people who are blissfully ignorant and they are buying over-priced properties because they are either too ignorant to do simple math, too lazy and/or they are ignorant enough to invest based on advice from either people who are ignorant or based on advice from people who have their own agenda.

People are crazy! About 15 years ago, I met a retired CPA who gave a person he casually met his entire life's savings of $125,000 because the person he met said he had invented batteries that work with only water. All you need to do is fill batteries with water and you can power your entire house, vehicles, cell phones, boats, ATV's and on and on. 

How many people lose thousands of dollars at race tracks because someone gives them a hunch.

People who can's answer the following questions are buying the properties with negative cash flow.

Do your own survey and ask everyone you meet the following questions. I think you will be surprised.

.1. How many ounces are in a pound?

2. What is 20% of $3200.

3. What is the capital of California is?

4. How many square feet are in a room 15 x 20?

You will find the most popular answers are?

1. 12, 24 and 28

2. This one gets really crazy answers like 14-1/4, 16, etc.

3. Believe it or not? This one gets Washing State and Washington D.C.

4. You will get answers all over the map.

The downside to having tenants pay for the water is you can bet your buns that tenants will not water the trees, shrubs or lawns when they are paying for the water and I know for a fact it costs more money to put a yard back together than you will ever pay for water.

Here is another serious problem with tenants paying for their own water in a duplex. Who pays for the water for the lawn and for the laundry room if it is separate. I've seen landlords put in separate meters and then pay money back to one tenant for the laundry room and how does the tenant know he is getting a fair refund and why should the tenant front the money for the lawn and/or laundry room. Or...do you install a 3rd meter.

Don't know about other states, but in Nevada we own several homes and when tenants don't pay their utility bills the landlords have to pay. Just a few weeks ago, I got hit with $450 for electric and water for a single-family house.

The best thing I did with my apartment buildings was I had 100-gallon gas water heaters, installed separate water heaters in every unit and I save about $30,000 every year and every 10 years I save $300,000.

It was strange that every time I went out of town a 100-gallon heater would go on the blink and it is very difficult to find someone who knows how to fix them on the weekend. So, every tenant did not have hot water for 3 or 4 days. Now, only 1 tenant is out of hot water and I have no problem getting someone to change one even on a holiday. After 15+ years, I do have a sleuth of water heaters that start to leak, but we stock them in our warehouse and it takes less than 2 hours to change one including travel time.

Back in 1965, I managed 135 rental units in the worst parts of Springfield Mass and as far as Hartford Connecticut.  The landlord knocked on one door to collect the rent and the tenant broke his nose and said, I told you not to come again for the rent".

We had the housing authority (if that is what it was called it at the time) on our butts every day because the tenants would break window screens, break door locks, keep their apartments filthy so they were infested with roaches and rats and we could not keep up with repairs. I was only 15-years old when I started working for the landlord and even though I knew nothing about managing properties I knew the landlord was spending more for repairs than his gross income. Fortunately, for him, he was filthy rich and owned 25 movie theaters, 9 huge shopping centers that eventually had K-Marts in them and he owned huge commercial properties e.g. factories and other commercial buildings. He was the person who inspired me to invest in the stock market when I was 15-years old and inspired me to invest in real estate.

We have some really bad areas in California, but the laws are more landlord friendly and even the worst tenants are more respectful that what I dealt with in Massachusetts. A few years ago, I owned some rental properties in Holyoke, Mass. and evicting tenants was such a huge nightmare I sold the properties after owning them for more than 40 years and the selling price was depressing when compared to the purchase price and slow appreciation over the 40+ years. I wouldn't have done much worse if I gave them to a charity.